The outstanding debts of the local authorities of the United Kingdom are now about £600,000,000. The whole of this amount has been spent upon the objects referred to and they are worth considerably more. I submit that it is a very conservative estimate to value local government property at 20 per cent. more than the amount of the outstanding loans or say £720,000,000.
We thus arrive at £1,370,000,000 as a rough but reasonable estimate of the value of the local property. Adding it to the £550,000,000 of Imperial property we get £1,920,000,000 as a valuation of that portion of the accumulated wealth of the United Kingdom which is in the collective ownership of the nation.[18]
But, against the possession of these large amounts of property we have to set the mortgages upon the public assets which are represented by the National Debt and Local Debts. These, of course, are not directly secured upon Imperial and Local Government property, but upon the Imperial and local revenues. It is convenient, however, to regard them as mortgages, and to deduct them as I have done in the table. Making this deduction, I am able properly to include the amount of the national debt and local debts in my estimate of the value of private property (see items g and h). This gives a true view of the subject. The people of the United Kingdom collectively own relatively little property. In the time to come this will be remedied, for local authorities are rapidly acquiring reproductive undertakings. Until they are paid for, however, by the discharge of the loans raised to acquire or equip them, we do well to remember that they are mortgaged to individuals. Therefore, in deducting the debts from the valuation of public property and in adding them to the private property I submit that I am presenting an accurate picture of the actual position.
To sum up this part of the subject, the people of the United Kingdom collectively possess property worth £1,920,000,000 and are collectively indebted to a few of their number in the sum of £1,362,000,000. Thus, all that they may be said to own collectively is property worth the comparatively insignificant sum of £558,000,000.
I pass to the private property which is commonly called "national" wealth.
In item c agricultural lands and the farmhouses and other buildings thereon are valued at £1,040,000,000. In 1898 the Royal Commission on Agriculture arrived at the value of lands by taking 18 years' purchase of the profits of 1893. The value of agricultural land is now rising with the appreciation in the price of food.[19]
Item d "Houses," it should be clearly understood, covers not only dwelling-houses, but factories, workshops, offices, and all other premises save farmhouses. It also includes, as is so often overlooked, both house value and land value. In capitalizing at 15 years' purchase, the market value of the property is certainly not overstated. The £3,255,000,000 so arrived at is a handsome sum and by far the most considerable item in the list. It includes, in the value of factories and other business premises, a considerable amount of trade capital.
It should not be forgotten that we are speaking of economic valuation, not of intrinsic value. Houses which rank for no small part of the £3,255,000,000 are of small intrinsic value, their economic value being only produced by the sheer necessities of those whose needs must find a roof. London contains great areas of filthy brick-work which are worthy to be destroyed, but worth many millions to the houselords who draw rents from them.
Item f deals with farmers' capital. Here I have used the figure arrived at in 1905 by R. H. Inglis Palgrave.[20] After careful examination of the amounts of capital per acre employed in various parts of the country, Mr Palgrave considers £6 an acre an excessive estimate, but Major Craigie, who has given the subject much attention, is inclined to think it too low.
Items g and h have been already referred to.